By MICHAEL VIRTANEN
ALBANY, N.Y. (AP) — Barclays Bank has agreed to pay $100 million to 43 states and the District of Columbia to settle allegations it improperly set key interest rates almost a decade ago, affecting payments on investments.
Monday’s settlement includes $93.5 million in restitution and costs of the investigation led by the New York and Connecticut attorneys general.
Authorities said that during the global financial crisis from 2007 to 2009 the British bank lowered rates to avoid the appearance that Barclays was in financial trouble. They also said that from 2005 to 2009 Barclays traders requested rates to benefit their trading positions.
Barclays, which cooperated with the probe, is the first of several banks under investigation by the states to resolve claims, New York Attorney General Eric Schneiderman said. It was among a panel of 16 banks that made submissions that were supposed to reflect borrowing rates for the London Interbank Offered Rate for the U.S. dollar.
“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big banks and other financial institutions that engage in fraud or impair the fair functioning of financial markets,” Schneiderman said.
Government entities and nonprofits in New York and throughout the U.S. were among those who were defrauded of millions of dollars when they entered into swaps and other financial contracts with Barclays, according to his office. Investigations are continuing into the actions of several other banks.
Barclays said it’s pleased to resolve the investigation into legacy LIBOR and Euro Interbank Offered Rate activities. “We believe this settlement is in the best interests of our shareholders and clients, and allows us to continue to focus on the future and serve our clients,” spokesman Andy Smith said.
Other states in the settlement are Alabama, Alaska, Arkansas, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.